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5 Rules to follow While Trading Futures..

Trading in itself is a big business if done right and while it looks easy at the outset , gradually one begins to realise that it needs real hard work and discipline to master the art of Investing and trading.It takes a lot of time to learn the minor details of fundamentals and technical details of trading.

Also the biggest hurdle of running this business successfully is no one else but 'You' the Trader. It takes a lot of discipline and will power to control your emotions which include Fear , Hope , Greed which while working continuously in the background would not let you run your business successfully.

More on this Later..But here are the 5 rules you must follow while trading futures..

1) Strict Stop loss Orders : There is only one trading system in this world i.e having a stop loss ,everything else is secondary.As they say " If you do not learn to take that small loss today , soon you will have to take the mother of all losses. If you do not agree please visit the chart posted at the Investlane blog.

2) Do not Over Leverage : Once you plan a trade , the first thought should be given to the fact that how much you are willing to risk on that particular trade.Because the probability of the trade going right will always remain 50:50 . When you risk a lot on a single trade you get into a trap where you are concentrating on making money and not on managing risks and reducing your losses which ultimately results into huge losses.

3) Control your Emotions : You should be able to allow yourself to think rationally at all times.Cutting your losses short and letting the profit run should be your state of mind while if you let your emotions take control it is the opposite of this you would end up doing.

4) Know when to Exit : Important is the entry of the trade but more important is knowing when to exit the trade.Whether it is about taking a small loss or trailing the position to the point of maximum profitability.There is a famous saying in the stock market .. " Never let your trading profits turn into a loss"

5) Patience : Future traders must learn that its not necessary to have a position in the markets at all times.Its good to wait with cash for the right opportunity and make hay while the sun shines.Also the lessons in patience also help traders to sit on profitable positions long enough.


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